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Vodafone Set To Be Number 2 Network At The Expense Of Optus

The role out of a new 3G Edge network in Australia by the UK carrier is set to hurt Optus who are struggling from one network problem to another. While being hammered from the top end by Telstra, Optus are set to feel the heat of a network blowtorch from Vodafone as they go after disgruntled Optus customers.

Core to Optus’ problems is the lack of infrastructure invested by their owners, the Singapore government. Currently in a battle with Telstra via their membership of the Terria Consortium, who along with Telstra is bidding for more than $4.5 billion dollars in Federal government funding for a national broadband network, Optus is facing legal action in both NSW and Queensland following the failure of their services.

While Telstra has invested billions in their new NextG network and a mooted private broadband network, Optus has struggled from one disaster to another. Last week, after only four weeks the carrier axed their heavily promoted Wireless Fusion, which ironically had become one of their most popular wireless broadband services. The move followed a massive TV and print advertising campaign. Globally the Company was also labelled as having the slowest Apple 3G iPhone networks in the world.

If Optus and the Terria consortium do not get funding from the Federal government, Optus is going to have to fork out billions to fix its network – something that the Singapore government is going to loath. They prefer to lobby Canberra for funding instead of investing their own money in new infrastructure.

Another problem they will face is the shortage of investment capital as banks and lending institutes cut back on capital works programs.

Back in December 2006 Optus and Elders announced they had formed a joint venture and lodged an application for funds under the Australian Government’s ‘Broadband Connect’ Infrastructure program to deliver telecommunications services to rural and regional Australia, however this project ended in disaster for the Singapore-owned carrier.

In April of this year the Federal government axed the Optus rural broadband network plan because it failed to meet the required conditions, the federal Government said at the time. Broadband and Communications Minister Stephen Conroy not only axed the Opel WiMAX network, a joint venture project by Optus and Elders but he left Optus with a big bill for work done to date.

To battle Telstra from the top end of the market, and Vodafone from the #3 spot, is going to make life difficult for Optus as Vodafone are savvy marketers who will later this week announce a brand new advertising and communications agency following a recent review.

Already strong in the teenager and young adult market the new network will allow Vodafone to take on the Telstra NextG network. However, as Vodafone crank up their offering so will Telstra straight to 42Mbps.

Recently Telstra and its mobile network supplier Ericsson finished testing the new service with Telstra claiming that they will network speeds of 21Mbps this year and 42Mbps next year on its Next G network.